National Day Rally 2019: Steadying the ship
in uncertain times
Against the backdrop of continuing Sino-US tensions and a slowing economy, PM Lee Hsien Loong’s 2019 National Day Rally (NDR) speech, which is expected to be his last before he steps down as Prime Minister, reassured the population that Singapore was in a good position to manage the headwinds. He urged for unity between the government and citizens to navigate the challenges ahead, while unveiling his longer-term vision for Singapore.
The economic uncertainty wrought by the ongoing US-China trade war was a major theme of the NDR speech. PM Lee highlighted his concerns that Singapore’s future will be a more troubled one if US-China relations continue to deteriorate, with Singapore companies that export to China, and those that export to the US from factories in China hit. Singapore will be disadvantaged as companies seek to invest in countries with a much lower cost base. While economic growth had slowed significantly, stimulus measures were not warranted at this juncture with unemployment and retrenchment rates remaining low. That said, PM Lee emphasised that the government was following the situation closely and would promptly respond with appropriate measures if required.
There was a sense that the government was keeping its powder dry for the impending General Elections, which must take place by April 2021. Instead of the more immediate bread-and-butter issues covered in NDR 2018 such the costs of healthcare and housing, the key initiatives in the NDR 2019 were focused on the longer term, such as increasing subsidies for pre-school and tertiary education, raising the retirement and re-employment ages, and addressing climate change. PM Lee also hinted that more initiatives to address cost of living issues were in the pipeline, such as supporting couples to have more children and keeping HDB flats affordable, which would be announced in due course, likely closer to the General Elections.
All sectors will be affected by the wide-ranging announcement on supporting older workers. Between 2022 and 2030, the retirement age will be raised from 62 to 65, and the re-employment age will be raised from 67 to 70. CPF contribution rates for workers above 55 will be raised starting from 2021. In another indication that the General Elections are on the horizon, PM Lee said that DPM Heng Swee Keat, widely expected to be the anointed successor, will be announcing a support package for businesses to adjust to the new changes in Budget 2020.
The government’s 2,000 hectare Greater Southern Waterfront project, the newest mega-project that is six times the size of Marina Bay and double the size of Punggol, will provide opportunities for the property development, infrastructure and hospitality sectors, with new attractions, housing and office spaces planned. The space will be freed up for redevelopment after PSA moves its city terminals to Tuas by 2027.
The human resources sector should take note of the continuing focus on SkillsFuture and reskilling of older workers. PM Lee highlighted that employers must redesign jobs and training around the abilities of older workers. Employees are encouraged to reskill early from ages 40-50, with the government standing ready to support all companies in the reskilling process.
There will be opportunities for those in the early childhood education sector, with annual government spending on early childhood education set to “more than double” over the next few years from the current S$1 billion. The income ceiling for means-tested subsidies will be raised to S$12,000, allowing 30,000 more households to qualify from 2020, thus increasing access to early childhood education.
In an interesting twist, climate change also took centre stage in the 2019 NDR, with PM Lee highlighting that it would cost at least S$100 billion to protect Singapore against rising sea levels, and that possible options included building polders and dykes along the eastern coastline, as well as reclaiming a series of islands from Marina East to Changi.
Focused MORE on macro issues and LESS on the usual sweetener packages, the 2019 NDR seemed designed to pass the baton to incoming leaders. While clearly geared towards the longer term and steadying the ship in the current uncertain economic climate, the repeated references to upcoming initiatives leave space for the newer generation of leaders to make their mark.